Preparation of Financial Statements
Commercial lenders, bonding companies and some vendors require periodic financial statements that must be prepared by CPA’s in order to assess a company’s financial stability. Generally, there are three levels of attestation or assurance that CPA’s provide with respect to financial statements: Audits, Reviews and Compilations.
Audits of financial records are the highest level of attestation, and the most costly. Typically, Audits are required for large Securities and Exchange registered companies and companies seeking to borrow in excess of $5 million operating capital. Our firm does not provide Audit Services. However, we may be able to work with your lender to provide a different, more frequent, level of assurance that will meet their reporting requirements.
A Financial Statement Review is the mid-range of attestation. The scope of a Review is much less than an Audit, and therefore less costly. A full set of Financial Statements is required to be delivered. These statements include a Balance Sheet, Profit & Loss Statement; Statements of Cash Flow; Notes to the Financial Statements; and an Accountant’s Review Letter. These reports are prepared in accordance with the Accounting Standards of the American Institute of Certified Public and typically meet lender’s requirements for mid-range loans.
The most common form of attestation, and most cost effective, are Compiled Financial Statements. These statements require much less “field work” than Audits or Reviews. Accordingly, the business owner bears more responsibility for the accuracy of the statements and the internal controls procedures regarding their business financial practices. Compilations may include the full range of reports required for audits and reviews or may be limited to a Balance Sheet; Profit & Loss Statement; and an Accountant’s Compilation Letter. These Financial Statements typically meet lender’s requirements for operating capital loans of less than $1 million.
Our firm provides Compilation and Review attest services for a variety of small to mid-size business clients. The frequency and complexity of these services vary according to the individual needs of our client. Whether it is a Quarterly Review for your bonding company or Annual, Quarterly, or perhaps Monthly Compiled Financial Statements requested by your lender, our team of accounting professionals can serve you.
Peer Review Program for the American Institute of Certified Public Accountants and Texas Society of Certified Public Accountants Administered by the Texas Society of CPAs…”
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